Regulator: New oil train rules could have wide reach

WASHINGTON — Transportation Secretary Anthony Foxx suggested Monday that coming mandates to boost the safety of hauling oil by train will take a comprehensive approach, going beyond requiring changes to the tank cars that carry crude across the country.

The issue “has to be dealt with comprehensively,” Foxx said, after a speech at the National Press Club. “So many folks out there say ‘just figure out what the tank car should look like,’ and that’s one piece of it, but speed is an issue and there are several other components that matter.”

Transportation officials already have drafted their plan to enhance standards for the tank cars that carry oil and to bolster operational controls for trains hauling high-hazard, flammable substances. The Office of Management and Budget is now reviewing the proposal, which could be unveiled later this year.

Operational changes the Transportation Department could consider include codifying speed limits for trains heaving flammable oil, perhaps lower than the 40 mph cap now observed in some areas. There also might be new limits on leaving oil-carrying trains unattended. And, while the exact specifications are not known, the measure is almost certain to require companies to stop using rupture-prone tank cars built before October 2011 and begin adopting newer models, with thicker shells and other reinforcements designed to make them more resilient in an accident.

Canadian regulators imposed similar mandates after the July 6, 2013 derailment in Lac-Megantic, Quebec, that killed dozens and leveled downtown. That disaster, along with other recent fiery accidents involving crude-carrying trains, stoked concerns about the surge in oil traveling by rail from wells in North Dakota to refineries in eastern Canada and the Gulf Coast.

Oil industry leaders have warned that major changes could hamper the flow of crude and even the production of it in areas such as North Dakota that don’t have enough pipelines to carry the fuel to market.

One of the major challenges for the Obama administration in crafting new rules is advancing safety without throttling domestic oil and gas production, a bright spot in the nation’s economy today. Foxx highlighted that struggle on Monday.

“It is undeniable that we are in a country that has a chance to build a new economy on our energy production,” he said. “It’s really one of the drivers of our economic growth today and really will probably be so for the near future, but one of the things we recognize as an agency . . . in order to realize that future we also need to step up our game on the safety front.”

It is not clear whether the Transportation Department will require oil to be stabilized — a process that strips off the lightest, most volatile gases — before it is loaded into tank cars. Only one such stabilizer has been built in North Dakota’s Bakken Formation, according to a Wall Street Journal report earlier this month. That’s in contrast to other areas with long histories of oil production, such as in Texas, where an entire infrastructure has been established around wells to stabilize, process and transport the crude that flows out of them.

In Texas, “there’s an industry built up around oil production, refining, separating material (and) using all the pieces of the material that are separated,” Foxx said. By contrast, “we basically have infrastructure in North Dakota that is excavating this material.”

Foxx declined to say whether stabilization requirements would be built into any new safety rule. But he said the issue is a major consideration at the Transportation Department and its Pipeline and Hazardous Materials Safety Administration.

He softly criticized some comments by the oil industry suggesting that the crude coming out of North Dakota oil wells tapping the Bakken formation is substantively the same as what is flowing out of the Eagle Ford shale in Texas.

“There is a fair amount of confusion, I think, that is generated when the industry says, ‘well, this is just the same type of stuff that’s being pulled out in some other parts of the country,’ because there are a couple things that are different,” Foxx said. “No. 1, . . . in some parts of the country, there’s more stabilization activity that occurs before it is actually transported, and secondly, there’s also the fact that these trains are moving in huge units, sometimes 100 cars at a time. The sheer scale of the impact of these trains can be a bit of a challenge.”

The American Petroleum Institute stressed the importance of approaching safety “with a foundation grounded in science and data.”

“The best science and data do not support recent speculation about vapor pressure and the process known as stabilization,” API said in a statement. “Crude oil is sufficiently stabilized for transport in the field using conventional separation equipment already at well sites, such as separators and heater-treaters.”